Page images
PDF
EPUB

complete understanding of the situation we should endanger a negotiation which we have succeeded in bringing almost to an end after overcoming a great many obstacles. I hope that this time the cooperation by friends in the Department will not be lacking for the success of an effort advantageous in every sense and which will contribute also to widening the field in which we can develop further the friendship between our two countries.

PRESIDENT OLAYA

821.6363 Barco/452: Telegram

The Secretary of State to the Minister in Colombia (Caffery)

[Paraphrase]

WASHINGTON, February 27, 1931—2 p. m. 10. Your 21, February 25, 5 p. m. It is our understanding that the company will accept the first modification suggested by President Olaya with regard to any disputes in royalty payments, provided the Government of Colombia agree that if it intends to file suit in any given case it will do so within 90 days thereafter, so that the books of the company will not be held open indefinitely and so that the company can know what liabilities it may have to meet.

With respect to the second point, it is the feeling of the company that it cannot agree to a fixed term at the end of which exploitation must begin because no one can predict what petroleum resources may exist there and how soon it will be possible to commence exploitation. Probably the company will make a counterproposal to the effect that if in a given time the minimum production stipulated has not been reached, it will put more drilling rigs into operation.

The Department, of course, does not undertake to pass upon the contract as a whole; nevertheless, it hopes that these offers of the company will make it possible for the two parties to reach a satisfactory agreement at any early date.

STIMSON

821.6363 Barco/455: Telegram

The Minister in Colombia (Caffery) to the Secretary of State

BOGOTÁ, March 4, 1931-6 p. m. [Received 8:37 p. m.]

29. Department's telegram No. 10, February 27, 2 p. m. Barco

contract signed today.

CAFFERY

821.6363 Barco/470

The Secretary of State to the Minister in Colombia (Caffery)

No. 223

WASHINGTON, March 11, 1931. SIR: The Department has received your telegram No. 29 of March 4, 6.00 p. m., reporting the signing of a contract for the settlement of the Barco Concession controversy by representatives of the South American Gulf Oil Company and the Colombian authorities. The Department has noted with great satisfaction the skill, tact and good judgment which you have exercised in extending your informal good offices to assist the private American interests involved and the Colombian Government to arrive at a mutually satisfactory settlement of this long pending and difficult question, and desires to commend you upon the successful termination of the controversy. Very truly yours, For the Secretary of State: FRANCIS WHITE

821,6363 Barco/507: Telegram

The Minister in Colombia (Caffery) to the Secretary of State

[Paraphrase]

BOGOTÁ, April 16, 1931-11 p. m. [Received April 17-1:21 a. m.]

50. My 37, March 13, 11 a. m., despatch No. 2388, March 27, and first numbered paragraph telegram 49, April 10, 4 p. m.25 This afternoon President Olaya told me that it now appears impossible to have the present Congress ratify the contract without modifications; that he wanted to close the Congress now with the idea in mind of reintroducing the contract in the new Congress in July; he thinks he can make "combinations with new elements" in that body so as to get the contract ratified. He will not do this if the Department objects, but will continue the fight now. He "needs" the continued good will of the Department and especially for two matters:

(1) He fears that the banking group, whom he suspects of the most sinister designs, may endeavor to break up his negotiations over the Swedish match monopoly and he wishes the good offices of the Department in case of necessity.

(2) He wants the informal good offices of the Department in case of necessity in the matter of his requested advance from the United Fruit Company, and he hopes that the Department will express its general attitude in the premises to me. See my despatch No. 2403, March 30.26

[blocks in formation]

I think that under existing circumstances President Olaya should close Congress now and resubmit the contract to the new Congress in July. Representatives of Gulf here agree.

Urueta persists in believing that the Department could have "persuaded Gulf to accept the time limit and avoided this trouble". His judgment, however, is undoubtedly warped by his distress over the President's inability to get the contract through Congress now.

CAFFERY

821.6363 Barco/509: Telegram

The Minister in Colombia (Caffery) to the Secretary of State

[Paraphrase]

BOGOTÁ, April 18, 1931-9 a. m. [Received 12:22 p. m.]

51. My 50, April 16, 11 p. m. It is becoming increasingly clear that it is now too late to satisfy the Colombian Senate with time limit modifications; it will demand joint contract. Using the contract as a pretext unfriendly elements have turned current in this Congress against the President (the Senate has already overridden his vetoes, for instance, the general tariff) and he should close Congress at once and issue a statement that the failure of that body to approve a concession has prevented him from proceeding with the economic restoration of Colombia; the President could do this dramatically on Monday, April 20, at 4. Even the Cabinet is unaware that he is seriously contemplating this step.

President Olaya said he would reorganize the Cabinet on the basis of what each member can do for the ratification of the contract.

CAFFERY

821.6363 Barco/510: Telegram

The Secretary of State to the Minister in Colombia (Caffery)

[Paraphrase]

WASHINGTON, April 20, 1931-6 p. m. 22. Your 50, April 16, 11 p. m., first full paragraph, penultimate sentence, and your 51, April 18, 9 a. m. The matter of the adjournment of the Colombian Congress rests entirely with President Olaya, and, of course, the Department of State does not desire to interpose any objection thereto or make any suggestion in connection therewith. For your own information we desire to state that President Olaya will have, of course, the continued good will of the Department which will endeavor to assist him in his difficulties as far as it can appropriately

do so. The Department is concerned at the reliance which is being placed on it by President Olaya and Urueta. Your 50, April 16, 11 p. m., last paragraph. While the Department discussed the matter with the Gulf, it did not attempt to carry on negotiations with that organization with respect to the terms of the contract, which it considered to be a matter between that organization and the Government of Colombia.

STIMSON

821.6363 Barco/586: Telegram

The Secretary of State to the Minister in Colombia (Caffery)

WASHINGTON, June 20, 1931—1 p. m.

44. Legation's 84, June 18, 2 p. m.27 When the Catatumbo contract has been signed 28 you may, if in your opinion such action would be helpful and would not be misconstrued, express informally to President Olaya the gratification with which this Government has learned of the final satisfactory solution of this troublesome and longstanding problem.

STIMSON

GOOD OFFICES OF THE DEPARTMENT OF STATE IN RESOLVING DIFFERENCES BETWEEN THE COLOMBIAN GOVERNMENT AND AMERICAN BANKERS

821.51/871: Telegram

The Minister in Colombia (Caffery) to the Secretary of State

[Extract]

BOGOTÁ, March 12, 1931-5 p. m. [Received 10:25 p. m.]

36. My despatch No. 2301, February 25th." President Olaya informed me this morning that although budget had been reduced and balanced as American bankers had demanded, they told him this morning they were unable to pay over $4,000,000 as they had clearly promised because British Minister is insisting on prior payments on Supía Marmato claim.

27 Not printed.

CAFFERY

25 President Olaya signed the bill approving the Catatumbo contract on June 20, 1931 (821.6363 Barco/592).

821.51/871: Telegram

The Secretary of State to the Minister in Colombia (Caffery)

WASHINGTON, March 16, 1931-4 p. m.

16. Your 36, March 12, 5 p. m. Department has taken this matter up energetically with the bankers and has now been advised that the $4,000,000 will be paid to Colombia today. This will bring the amount paid so far up to $16,000,000.

The bankers state that they acted as reported in your cable in order to preserve Colombian credit in the British market in order that the long time financing envisaged by the Colombian Government may not be impeded when the time comes to undertake it. Pressure was brought to bear on Lazard and Company by the British Foreign Office, a man named . . . in the Foreign Office they state being responsible. Department understands that Lazard was told that the Foreign Office would close the British market to further Colombian financing unless this claim was paid and Lazard then brought pressure to bear on the American bankers. . . . They realize that they should have told President Olaya frankly the situation at the outset and have asked him to straighten out the British end so that he would know exactly where the difficulty came from. The National City Bank is cabling its representative in Bogotá to explain the matter now frankly and fully to President Olaya and to ask him to take the matter up through the Colombian Legation in London with the Foreign Office in order to remove any difficulties regarding the second $4,000,000 in which Lazard will participate. Lazard is not participating in the $1,000,000 to be advanced today and the bank professes that Bogotá representatives confused the two $4,000,000 credits and made the settlement of the British claim a condition for the payment of the first $4,000,000 advance, whereas it should have been done in connection with the second $4,000,000. The bankers have asked that you help their local representatives in explaining the situation to Olaya. They state that if he can get on without the second $4,000,000, which they doubt, it will not be necessary to take any further steps, but if they are to advance the second $4,000,000, it will then be necessary for the Colombian Government to take steps with a view to relieving Lazard of the pressure now put on them by the British Foreign Office.

Your despatch No. 1779 of October 14, 1930 29 reports that the Colombian law in settlement of the Supía Marmato claim was in a principal amount of £300,000 with interest at 5 per cent from May 29, 1925 on £140,000. The bankers state that it is their understanding that the principal amount is £300,000 plus 5 per cent current interest from 1925 and that in addition there is a claim of £40,000 about

Not printed.

591381-46-VOL. II- -10

« PreviousContinue »